Tokenized gold assets have surged in popularity with investors in 2020. These assets have a market capitalization of over $1 billion as of yesterday as indicated by CoinGecko. Tokenized gold assets offer investors a way to get exposure to the precious metal without the fees associated with managing an exchange-traded fund (ETF) or the burden of storing gold bullions. While there are many tokenized gold options in the market Paxos Trust Company's Pax Gold (PAXG) and Tether's Tether Gold (XAUT) dominate the space due to their large market capitalization. At the time of writing PAXG has a market cap of $558 million while XAUT has $499 million.

These surges in popularity of tokenized gold have coincided with a rise in the price of gold across 2020. Gold is often seen as a safe haven asset and people have turned to it due to the uncertainty around the banking sector and the prospect of currency devaluation due to government bailouts. As of yesterday, the price of gold was at $2,021 per ounce, approximately 3% off its all-time high of $2,089 that was recorded in August of 2020. Bitcoin, often known as the digital equivalent of gold due to its finite supply and other properties, has also surged in tandem with gold. Bitcoin prices have risen from $20,000 to $29,000 in correlation with gold's price. A multi-year high correlation between gold and Bitcoin was reported by Kaiko, a digital asset market research firm, on Monday.

It is clear that tokenized gold and Bitcoin have been attracting investors in 2020 and the gold rush of 2021 is just beginning.



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